BOCA RATON, Fla., Nov. 26, 2024 (GLOBE NEWSWIRE) -- Saxena White P.A. has filed a securities fraud class action lawsuit (the “Class Action”) in the United States District Court for the Western District of Tennessee against Rentokil Initial plc (“Rentokil” or the “Company”) (NYSE: RTO) and certain of its executive officers (collectively, “Defendants”). The Class Action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and U.S. Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder on behalf of all persons and entities that purchased Rentokil American Depositary Shares (“ADSs”) between December 1, 2023 and September 10, 2024, inclusive (the “Class Period”), and were damaged thereby (the “Class”). The Class Action filed by Saxena White is captioned Laborers Local #235 Pension Fund v. Rentokil Initial plc, et al., No. 24-cv-2932 (W.D. Tenn.).
Based in Crawley, England, Rentokil provides pest control, hygiene, and wellness services worldwide. The Company’s three main business lines are Pest Control, Hygiene & Wellbeing, and France Workwear. Rentokil is the largest global pest control services provider. North America Pest Control accounts for more than half of the Company’s annual revenue. Rentokil’s Level II sponsored ADSs are listed and traded on the New York Stock Exchange (NYSE) under the ticker symbol “RTO.”
Leading up to the Class Period, Rentokil announced on October 12, 2022, that it had completed its acquisition of Memphis, Tennessee-based Terminix Global Holdings, Inc. (“Terminix”) in a transaction valued at $6.7 billion, including $1.34 billion in cash and over 129 million new Rentokil ADSs (the “Terminix Acquisition”). As a result of the Terminix Acquisition, the Terminix business became part of Rentokil’s pest control business line, making Rentokil the largest pest control services provider in North America. After the Terminix Acquisition closed, Rentokil claimed it was well positioned to successfully integrate Terminix into Rentokil’s pest control business. Throughout the Class Period, Defendants touted Rentokil’s progress and success integrating Terminix and the benefits of the Terminix Acquisition.
The Class Action alleges that, during the Class Period, the Defendants made materially false and misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects, including that: (1) Rentokil experienced levels of disruption in the early pilots of the Terminix integration; (2) Rentokil experienced significant, ongoing, self-inflicted execution challenges integrating Terminix; (3) the disruption and execution challenges imperiled Rentokil’s integration plan for Terminix; (4) Rentokil and Terminix were still two separate businesses that were not yet integrated; (5) Rentokil’s failure to integrate Terminix negatively impacted the Company’s business and operations, particularly organic revenue growth in North America; and (6) as a result of the above, Defendants’ positive statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
The truth began to be revealed prior to the markets opening on April 18, 2024, when Rentokil issued a press release announcing its financial results for the first quarter of 2024, reporting that organic revenue growth in North America had increased by only 1.5% year-over-year—below the Company’s guidance of 2% for the first quarter and 2% to 4% for the full year, issued just six weeks earlier. During the corresponding earnings call held later that day Chief Executive Officer (“CEO”) Andrew M. Ransom assured investors that “our integration program is on track[,]” while Chief Financial Officer (“CFO”) Stuart M. Ingall-Tombs maintained, “we’re pretty confident about our revenue guidance now.” On this news, the price of Rentokil ADSs fell over 9%, from a closing price of $28.25 per ADS on April 17, 2024, to a closing price of $25.61 per ADS on April 18, 2024.
The truth was revealed on September 11, 2024 when, before the markets opened, Rentokil provided an unscheduled “Trading Update,” announcing that the Company now expected only 1% organic revenue growth in North America for the second half of 2024—well below the Company’s prior guidance. In the related press release, Rentokil disclosed, “[T]he trading performance in July and August was lower than anticipated. There has also been some modest disruption to organic growth from branch integration.” During a related conference call with analysts held later that same day, CFO Ingall-Tombs revealed that, after nearly two years of integration efforts, “I think what we have got is still because we’ve got 2 separate businesses, which are largely at an operational front-end not integrated yet. . . .” During the same conference call, CEO Ransom admitted, “This is a manifestation of execution challenges, execution -- a need to improve our execution. It’s not a market phenomenon. As we can see at the moment, if further information comes to light suggest [sic] reserve the right to change that answer, but I don’t think it’s market[,] I think this is on us.” On this news, the price of Rentokil ADSs fell over 21%, from a closing price of $31.60 per ADS on September 10, 2024, to a closing price of $24.95 per ADS on September 11, 2024.
If you purchased Rentokil ADSs during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as lead plaintiff. If you wish to apply to be lead plaintiff, a motion on your behalf must be filed with the U.S. District Court for the Western District of Tennessee no later than January 27, 2025. The lead plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as lead plaintiff to share in any Class recovery in the Class Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member.
You may contact Marco A. Dueñas (mduenas@saxenawhite.com), a Senior Attorney at Saxena White P.A., to discuss your rights regarding the appointment of lead plaintiff or your interest in the Class Action. You also may retain counsel of your choice to represent you in the Class Action. You may obtain a copy of the Complaint and inquire about actively joining the Class Action at www.saxenawhite.com.
Saxena White P.A., with offices in Florida, New York, California, and Delaware, is a leading national law firm focused on prosecuting securities class actions and other complex litigation on behalf of injured investors. Currently serving as lead counsel in numerous securities class actions nationwide, Saxena White has recovered billions of dollars on behalf of injured investors.
CONTACT INFORMATION
Marco A. Dueñas, Esq.
mduenas@saxenawhite.com
Saxena White P.A.
10 Bank Street, Suite 882
White Plains, New York 10606
Tel.: (914) 437-8551
Fax: (888) 631-3611
www.saxenawhite.com