Item 2. Unregistered Sales of Equity Securities
Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds
Recent Sales of Unregistered Securities
In connection with our incorporation on January 9, 2025, under the laws of the State of Delaware, we issued 1,000 shares of our common stock, par value $0.01, to Legence Parent for an aggregate purchase price of $10.00. The shares of our common stock described in the foregoing sentence were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), provided by Section 4(a)(2) of the Securities Act as sales by an issuer not involving any public offering.
On September 15, 2025, in connection with the closing of the IPO, the Company issued (i) 178,571 shares of Class A Common Stock and 46,680,762 shares of its Class B Common Stock, to Legence Parent and (ii) 28,844,369 shares of Class A Common Stock to Legence Parent II. Such issuances were undertaken in reliance on an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof as transactions by an issuer not involving any public offering.
Subject to the terms of the Amended and Restated Limited Liability Company Agreement of Legence Holdings and the Exchange Agreement, Legence Parent may exchange the LGN B Units, along with surrendering a corresponding number of shares of Class B Common Stock, held by it for shares of Class A Common Stock on a one-for-one basis (subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications) or, at the Company’s option and subject to certain conditions, an equivalent amount of cash.
Subsequent to September 30, 2025, on October 1, 2025, in connection with the closing of certain asset purchase and contribution transactions, the Company issued an aggregate of 145,600 shares of Class A Common Stock to the sellers.
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Such issuances were undertaken in reliance on an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof as transactions by an issuer not involving any public offering.
The stock issuances described above did not involve any underwriters, underwriting discounts or commissions, or any public offering and we believe such issuances are exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof.
Use of Proceeds
On September 15, 2025, we completed our initial public offering in which we issued and sold 29,487,627 shares of our Class A Common Stock (including pursuant to the partial exercise of the underwriters’ overallotment option) at an initial public offering price of $28.00 per share. The shares sold in the IPO were registered under the Securities Act pursuant to our Registration Statement on Form S-1 (File No. 333-289629), which was declared effective by the SEC on September 11, 2025. The IPO, including the partial exercise of the underwriters’ overallotment option, generated gross proceeds of approximately $825.7 million, which resulted in net proceeds to us of approximately $780.2 million, after deducting underwriting discounts and commissions of approximately $45.4 million. We used approximately $7.2 million of proceeds to pay the outstanding portion of the IPO's $28.4 million deferred offering costs. The IPO commenced September 2, 2025 and terminated following the sale of the shares in connection with the closing of the IPO. Except as set forth herein, no offering expenses were paid or are payable, directly or indirectly, to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates.
We indirectly contributed all of the net proceeds from the IPO to Legence Holdings in exchange for LGN A Units. Legence Holdings used approximately $773.0 million of the net proceeds from the IPO to repay amounts then outstanding under our term loan credit facility, with the balance being used for general corporate purposes. There has been no material change in the expected use of the net proceeds from the IPO as described under the heading “Use of Proceeds” in the Prospectus.
Goldman Sachs & Co. LLC and Jefferies acted as joint lead book-running managers and as representatives of the underwriters for the IPO. Blackstone Securities Partners L.P., an affiliate of Blackstone, underwrote approximately 3.9 million shares of the aggregate 29,487,627 shares of Class A Common Stock purchased by the underwriters in connection with the IPO (which figures take into account the partial exercise of the underwriters’ option to purchase additional shares), with underwriting discounts and commissions of $1.54 per share paid by the Company.
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