v3.26.1
Acquisitions
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Acquisitions are recorded under the acquisition method of accounting, and the total consideration transferred is allocated to the acquired net tangible and identifiable intangible assets based primarily on their fair values as of the acquisition dates. The estimated fair value of identified intangible assets are Level 3 fair value measurements and are determined using discounted cash flow techniques. Such fair value is estimated using a multi-period excess earnings method for customer relationships and backlog and a relief from royalty method for trade names. The significant assumptions used in estimating fair value of customer relationships and backlog include i) the estimated life the asset will contribute to cash flows, such as remaining contractual terms, (ii) revenue growth rates and EBITDA margins, (iii) attrition rate of customers, and (iv) the estimated discount rates that reflect the level of risk associated with receiving future cash flows. The significant assumptions used in estimating fair value of trade names include estimated discount rates and estimated royalties that would be paid to license a comparable asset. The royalty rates used in this method are based on published comparable market royalty transactions.
2026 Acquisitions:
On November 13, 2025, the Company entered into an equity purchase agreement to acquire all of the outstanding equity of The Bowers Group, Inc. (“Bowers”). The acquisition was completed on January 2, 2026. Bowers is a mechanical contracting company based in Maryland. This acquisition adds mechanical contracting capabilities to the Company’s existing electrical contracting capabilities in the mid-Atlantic region. The Bowers operations and associated goodwill are included in the Installation & Maintenance segment.
On March 1, 2026, the Company acquired Metrix Engineers, LLC (“Metrix”). Metrix is an MEP engineering business based in Washington. This acquisition expands the Company’s geographic footprint in engineering services. The Metrix operations and associated goodwill are included in the Engineering & Consulting segment.

Total consideration transferred of $460.0 million for the 2026 acquisitions consists of the following, subject to customary post‑closing purchase price adjustments (in thousands):

BowersMetrixTotal
Cash$283,104 $25,181 $308,285 
Issuance of Legence Corp. Class A Common Stock98,635 7,802 106,437 
Deferred consideration44,941 — 44,941 
Holdback— 299 299 
Total consideration transferred$426,680 $33,282 $459,962 
For the Bowers acquisition, the Company issued 2,551,672 shares of Class A Common Stock. The deferred consideration is payable on December 31, 2026, in cash, Class A Common Stock, or a combination, at the Company’s discretion. The
Company incurred incremental term loan borrowings of $200.0 million to partially finance the Bowers acquisition. Refer to “Note 7—Debt.” For the Metrix acquisition, the Company issued 149,331 shares of Class A Common Stock.
A summary of the purchased assets and liabilities for the 2026 acquisitions acquired at their fair value was as follows (in thousands):
BowersMetrixTotal
Cash$27,934 $34 $27,968 
Accounts receivable180,536 3,267 183,803 
Contract assets67,416 2,691 70,107 
Prepaid expenses and other current assets3,432 81 3,513 
Property and equipment15,611 359 15,970 
Operating lease right-of-use assets21,679 902 22,581 
Goodwill72,197 5,425 77,622 
Intangible assets302,000 22,400 324,400 
Other assets468 — 468 
691,273 35,159 726,432 
Accounts payable(79,834)(47)(79,881)
Accrued compensation and benefits(28,156)— (28,156)
Accrued and other current liabilities(11,505)(4)(11,509)
Contract liabilities(123,752)(925)(124,677)
Current portion of operating lease liabilities(4,000)(180)(4,180)
Current portion of long-term debt(1,276)— (1,276)
Long-term debt, net of current portion(1,391)— (1,391)
Operating lease liabilities, net of current portion(14,679)(721)(15,400)
(264,593)(1,877)(266,470)
Net acquired assets$426,680 $33,282 $459,962 
Finite-lived intangible assets that are being amortized using the straight-line method over their estimated lives at the applicable acquisition dates in 2026 consist of the following (in thousands, except weighted-average useful lives):
BowersMetrixTotalWeighted-
average
Useful Life
(in years)
Customer relationships$199,900 $18,700 $218,600 11.0
Trade names46,600 — 46,600 10.0
Contract backlog55,500 3,700 59,200 2.0
$302,000 $22,400 $324,400 
Goodwill arising from acquisitions is derived largely from expected synergies and growth as well as the acquired assembled workforces. Goodwill is deductible for tax purposes for the 2026 acquisitions.
During the three months ended March 31, 2026, the Company incurred acquisition-related costs of $10.5 million and $0.9 million for the Bowers and Metrix acquisitions, respectively, which is included in Acquisition-related costs on the Condensed Consolidated Statements of Operations.
The purchase price allocation presented above reflects preliminary fair value estimates. The Company is in the process of finalizing working capital amounts and valuation amounts for certain intangible assets acquired. The Company has recorded preliminary estimates for these items and will record adjustments, if any, upon finalization of the respective valuations. The Company expects to complete the purchase price allocations of the 2026 acquisitions as soon as practicable but no later than one year from the respective acquisition dates.
2025 Acquisitions:
On October 1, 2025, the Company acquired Innovative Mechanical & Design, LLC (“IMD”). IMD is a mechanical contracting business based in Colorado. This acquisition expands the Company’s geographic footprint in mechanical services. The IMD operations and associated goodwill are included in the Installation & Maintenance segment.
During the year ended December 31, 2025, the Company completed one other immaterial acquisition (“Other 2025 Acquisition”). The business is a part of the Engineering & Consulting segment and is an MEP engineering business based in Arizona. This acquisition expands the Company’s customer base and provides additional opportunities for cross-selling.
Total consideration transferred of $21.5 million for the 2025 acquisitions consists of the following (in thousands):
IMDOther 2025 AcquisitionTotal
Cash$9,302 $6,909 $16,211 
Issuance of Legence Corp. Class A Common Stock3,589 449 4,038 
Holdback1,000 250 1,250 
Purchase price receivable(37)— (37)
Total consideration transferred$13,854 $7,608 $21,462 
The Company issued 145,600 shares of Class A Common Stock as part of the 2025 acquisitions. Holdback amounts reflect consideration transferred to be paid in cash after the acquisition date assuming conditions for release of the holdback are met. As of March 31, 2026, there was $1.3 million in holdback included in Accrued and other current liabilities on the Condensed Consolidated Balance Sheets related to 2025 acquisitions.
A summary of the purchased assets and liabilities for the 2025 acquisitions acquired at their fair value was as follows (in thousands):
IMDOther 2025 AcquisitionTotal
Cash$— $76 $76 
Accounts receivable3,293 989 4,282 
Contract assets419 225 644 
Prepaid expenses and other current assets— 3 3 
Property and equipment1,318 23 1,341 
Operating lease right-of-use assets634 121 755 
Goodwill3,232 3,139 6,371 
Intangible assets7,690 4,070 11,760 
Other assets— 8 8 
16,586 8,654 25,240 
Accounts payable(1,100)(64)(1,164)
Accrued compensation and benefits(215)(74)(289)
Accrued and other current liabilities(152)(18)(170)
Contract liabilities(631)(769)(1,400)
Current portion of operating lease liabilities(238)(104)(342)
Operating lease liabilities, net of current portion(396)(17)(413)
(2,732)(1,046)(3,778)
Net acquired assets$13,854 $7,608 $21,462 
Goodwill arising from acquisitions is derived largely from expected synergies and growth as well as the acquired assembled workforces. Goodwill is deductible for tax purposes for the 2025 acquisitions.
Supplemental Pro Forma Information
The following unaudited supplemental pro forma results of operations for Legence are presented as if the Bowers acquisition had been consummated on January 1, 2025. There is no pro forma information included for the three months ended March 31, 2026, as the Company’s actual financial results for the period fully reflect the acquisition of Bowers. Pro forma results for the Metrix acquisition are not presented as they are not material to the Company’s Condensed Consolidated Financial Statements. These unaudited supplemental pro forma results are provided for illustrative purposes only and may not be indicative of the actual results that would have been achieved by the combined companies or the future results of the combined companies (in thousands).
Three Months Ended March 31,
2025
Revenue$682,737 
Net loss attributable to Legence$(31,561)
These pro forma combined historical results were adjusted for: an increase in interest expense for debt incurred by the Company to finance the transactions, increased depreciation and amortization expense due to the fair value of fixed assets and intangible assets, adjustments for operating lease right-of-use asset lease expense, recognition of retention bonuses and other share-based payments as compensation expense, accretion of deferred consideration, reclassification of transaction expenses to the beginning of the pro forma period, and other adjustments including income tax effects and noncontrolling interests. The pro forma combined historical results do not eliminate the impact of acquisition-related costs or any cost
savings or other synergies that may result from the acquisitions. The pro forma results include $14.5 million of acquisition-related costs that are not expected to have a continuing impact on the Company’s operations.
Results of Operations
For the three months ended March 31, 2026, Revenue of $243.3 million and Net loss attributable to Legence of $9.2 million are included in the Condensed Consolidated Statements of Operations for the Bowers acquisition. Results of operations for the Metrix acquisition are not disclosed as they are not material to the Company’s Condensed Consolidated Financial Statements.