M&A: Legence Acquires Building Decarbonization, Engineering Services Firm AMA Group

Sustainability consultancy Legence, backed by Blackstone, has acquired AMA Group -- an engineering company that helps building owners and property managers to decarbonize their infrastructure. Financial terms of the deal were not disclosed.

This is M&A deal number 255 that Sustainable Tech Partner has covered so far in 2024. Related: See all M&A deals involving sustainability, climate tech and green IT services listed here.

The acquisition surfaces roughly two months after rumors that Blackstone was exploring a potential IPO or asset sale involving Legence. Either move could potentially value Legence at roughly $5 billion including debt, a Bloomberg report said.

Regardless of the rumor, Legence has remained in acquisition mode.

Legence Acquires AMA Group: Building Decarbonization Strategy

Legence, previously known as Therma Holdings, launched in 1967. Blackstone acquired the business from Gemspring Capital in 2020. Blackstone rebranded Therma to Legence in June 2022.

Legence now positions itself as an Energy Transition Accelerator -- providing energy efficiency and sustainability solutions for the built environment. Among the key data points to note, Legence has:

• Maximized "the efficiency of more than 5.5 billion square feet across 22,000+ buildings."
• "designed more than 10 million square feet of net zero buildings, and more than 140MW of onsite renewable energy projects."
• played a role in more than 1,000 certified green building projects, including LEED, WELL Building Standard and Fitwel.

Here are 10 things to know about Legence, according to the company.

Legence has extensive M&A experience. Indeed, Legence acquired six businesses in 2023, and the company purchased Corporate Sustainability Strategies (CSS) in May 2024.

AMA Group: New York City Decarbonization Opportunities

The latest acquisition, AMA Group, has national reach. But the company's New York City presence, in particular, positions it well for building decarbonization opportunities. Indeed, acquiring AMA positions Legence to "better support building owners and operators in meeting the stringent energy reduction mandates of Local Laws 87 and 97," the buyer asserts.

AMA Group, founded in 2000, has roughly 250 employees across offices in New York City, Los Angeles, Miami, and Madison, New Jersey. The company's engineering services span "large-scale educational, residential, and commercial projects," AMA said. Key vertical markets served include media, broadcast and production facilities, and sound stage campuses. AMA has completed 1,000 projects worldwide, the company says.

AMA will ultimately tuck into CMTA, Legence’s largest mechanical, electrical, and plumbing (MEP) engineering services portfolio company, the buyer said. CMTA, founded in 1968, is based in Louisville, Kentucky. The company has 43 offices and 1,000 employees nationally. Legence has owned CMTA since 2021.

Legence Buys AMA Group: Executive Perspectives

In a prepared statement about the deal, Legence CEO Jeff Sprau said: “By championing building efficiency today, we are dramatically improving the possibilities of a healthier and more sustainable tomorrow. CMTA and AMA Group are leaders in their respective fields, and joining the firms will further establish Legence as a trusted partner in built environment decarbonization. We’re always seeking partners with aligned talents and values. The synergies between AMA and CMTA – and the synergies this new team brings to Legence – will provide best-in-class services to customers seeking the most efficient solutions for their facilities.”

Added CMTA CEO Jimmy Benson: “By adding AMA Group to our family, we gain exceptional engineering talent and a strong experienced leadership team with a reputation for excellence in the New York City market where decarbonization policies create a great opportunity for CMTA and Legence. We could not hope for a better partner."

Concluded AMA Group Founder Arthur Metzler: “We could not be more excited to partner with such sophisticated entities as CMTA, Legence, and Blackstone. This partnership will allow us to elevate the organization to the next level, providing incredible growth and prosperity for our entire staff."

Building Energy Management, Carbon Reduction: Market Opportunities

The Legence-AMA Group deal surfaces at an opportune time for both consulting firms. Indeed, cities and countries worldwide are launching regulations that will force building owners and real estate investors to decarbonize their commercial and residential assets.

Examples include:

• Boston's Building Emissions Reduction and Disclosure Ordinance (BERDO);
• New York Local Law 97;
• a large buildings emissions law in Seattle, Washington; and a
• Future Homes Standard in the United Kingdom.

Meanwhile, demand for building energy management systems appears steady to strong, depending on which market forecast you potentially believe. For instance:

• The global building automation and control system market will reach $168.8 billion by 2031, up from $87.3 billion in 2022, Transparency Market Research forecast. That's a compound annual growth rate (CAGR) of 7.9%, the firm said.
• Spending on building management systems is expected to reach $19.25 billion in 2023, up from $6.65 billion in 2016. That's a 16.7% compound annual growth rate (CAGR) during the forecast period, according to MarketsAndMarkets. 

The U.S. government also is assisting the market. For instance, the federal government plans to spend $250 million to help federal agencies implement net-zero building projects.

We'll continue to watch Legence for potential business and ownership updates.