Blackstone-backed Legence valued at $2.75 billion after shares fall in debut

By Atharva Singh and Arasu Kannagi Basil

Sept 12 (Reuters) - Legence LGN.O, an engineering and maintenance service provider backed by Blackstone, debuted on the Nasdaq with a market valuation of $2.75 billion after its shares fell 3.6% on Friday.

The post-Labor Day initial public offering rush is shaping up to be one of the busiest in years, with analysts saying the momentum could be the fastest since the 2021 boom.

While the market has seen some stunning first-day performances, the stand-out debuts have largely come from venture capital-backed companies rather than private equity.

"Given that private-equity deals are capital-structure transactions with no proceeds going to the firm, it's much more a buyer's market for those deals. We also typically don't expect these deals to perform strongly initially," IPOX CEO Josef Schuster said.

Legence shares opened at $27 apiece, compared with the offer price of $28 apiece.

The San Jose, California-based company had raised $728 million in its IPO by selling 26 million shares within the marketed range of $25 and $29 apiece.

"Legence comes with significant debt and recent history shows investors have pushed back on similar private equity-backed deals after lackluster debuts from SailPoint, NIQ and McGraw Hill," said Jeff Zell, senior research analyst at IPO Boutique.

Blackstone, which bought Legence from private-equity firm Gemspring Capital in 2020, is taking the company public as part of a broader push to bring more of its portfolio firms to market.

The world's largest alternative asset manager has said it plans to pursue the busiest slate of IPOs since 2021.

Legence, which designs and installs systems such as heating, ventilation, air conditioning and energy-efficiency solutions, is focusing on fast-growing sectors with technically demanding buildings, including life sciences and data centers.