M&A: Legence Acquires Commercial Real Estate Sustainability Consulting Firm CSS

Legence, backed by Blackstone, has acquired Corporate Sustainability Strategies (CSS) -- a commercial real estate sustainability consulting firm. Financial terms of the deal were not disclosed.

This is M&A deal number 201 that Sustainable Tech Partner has covered so far in 2024. See all M&A deals involving sustainability, climate tech and green IT services listed here.

Legence Acquires CSS: Business Backgrounds

Corporate Sustainability Strategies (CSS), based in Huntington Beach, California, focuses on the multi-sector real estate market. The company, led by President and CEO Brenna S. Walraven, "provides expert sustainability strategy development and execution plans that enable clients to improve financial and ESG performance," the company asserts. Key CSS services include sustainability assessments, strategy development, implementation frameworks, strategy execution, property assessments and action plans, and recognition and reporting services.

CSS will merge with RE Tech Advisors -- another business in the Legence portfolio.

Meanwhile, Legence was previously known as Therma Holdings, which 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. Here are 10 things to know about Legence, according to the company.

Smart Building Trends and Net Zero Strategies: Market Forecast

The Legence-CSS deal surfaces at a key time. 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.

Legence Acquires Corporate Sustainability Strategies (CSS): Executive Perspectives

In a prepared statement about the Legence-CSS deal, Deb Cloutier, chief sustainability officer of Legence and president of RE Tech Advisors, said: “As a woman-owned organization with a deep commitment to corporate responsibility and positive change, CSS aligns perfectly with Legence's mission to accelerate sustainability in the built environment and enhance in-house expertise. This acquisition marks a significant milestone in our journey to deliver comprehensive solutions that drive both financial and environmental value for our clients."

Added Jeff Sprau, CEO of Legence: “Our new partnership with CSS is further proof that we’re attracting top talent and leadership, positioning Legence as the leading provider of integrated decarbonization services. CSS’ nearly three decades of experience supporting clients with billions in assets and delivering sustainable outcomes is a perfect match for our customer base as well as our culture. We’re excited to leverage this expertise.”

Concluded Brenna Walraven, president and CEO of CSS: “Joining Legence’s family of more than 5,000 team members will expand our opportunities to exceed client satisfaction and deliver impactful, high-performance outcomes across the real estate sector. I’m looking forward to continuing to elevate sustainability within the built environment, driving business case solutions, and am thrilled to be working with a mission-driven and passionate team.”

Walraven now shifts to executive strategic advisor at RE Tech Advisors

Legence has extensive M&A experience. Indeed, Legence acquired six businesses in 2023.