The company's revenue and EBITDA in fiscal 2023 and the first quarter of 2024 exceeded our expectations due to strong increases in data center and health care demand and the expansion of its Energy Solutions and Consulting Engineering segments. This outperformance enabled the company to pursue a $125 million incremental add-on while keeping its leverage near 7x (pro forma for the transaction). Our base-case forecast assumes Legence will reduce its S&P Global Ratings-adjusted leverage to 6.5x over the next 12-18 months on its expanding backlog ($1.9 billion as of the first quarter of 2024) and contributions from its recent acquisitions, which it has yet to fully realize. Given the highly fragmented nature of, and the secular growth trends in, its
