Joby Aviation closes $591 million stock offering with full underwriter option
Investing.com -- S&P Global Ratings has upgraded Legence Holdings LLC to ’B+’ from ’B’ following a significant debt reduction after its initial public offering, with a stable outlook.
The upgrade reflects Legence’s improved credit metrics after a $780 million debt paydown. S&P expects the company’s adjusted debt to EBITDA ratio to reach about 4.0x in 2025 and decrease to the mid-3x range in 2026, down from 7.8x in 2024.
The rating agency forecasts strong annual free operating cash flow (FOCF) of $90-100 million in 2025, improving to more than $135 million in 2026. This improvement is largely attributed to reduced interest payments, lower IPO-related costs, and a 75 basis point rate reduction under the existing credit agreement.
Legence has shown substantial growth since being acquired by Blackstone, increasing revenue to $2.2 billion as of June 2025 from $605 million in 2020. During this period, adjusted EBITDA rose to $236 million, fueled by over 20 acquisitions that expanded the company’s size and scale.
S&P views Legence’s business favorably due to its strong exposure to high-growth sectors including data centers, technology, life sciences, and healthcare, which make up 55% of its client base and include 60% of Nasdaq-100 companies. The rating agency anticipates continued revenue growth of approximately 12% in 2025, driven by recent acquisitions, and solid organic growth of 5% in 2026, with EBITDA margins remaining at about 10%.
Based on these factors, S&P revised Legence’s business risk assessment to "fair" from "weak." However, the company still generates most of its revenue in the U.S., lacks the customer or geographic diversification of higher-rated peers with similar leverage profiles, and has relatively low EBITDA margins for facility service companies.
Blackstone maintains a majority ownership stake of approximately 71% following the IPO. S&P considers this a risk factor for potential future leveraging events, though it believes there is minimal likelihood that such events would increase leverage above 5x.
The stable outlook reflects S&P’s expectation that Legence will grow organic revenues by about 5% in 2025 and 2026 while maintaining leverage below 5x.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.