According to the Complaint, IFF purports to be an “innovator of sensory experiences” by creating products that consumers taste, smell, or touch. IFF acquired Frutarom Industries Ltd. (“Frutarom”) in October 2018. After the acquisition, the Company’s product portfolio includes natural colors, antioxidants for food preservation, nutraceuticals, ingredients for infant formula and proteins for elderly nutrition, and expanded core product lines with savory solutions aimed at the meat and fish industry, citrus and other natural flavors, specialty ingredients, and new cosmetic actives.
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Complaint alleges Defendants failed to disclose to investors: (1) that Frutarom had bribed customers in Russia and Ukraine; (2) that senior management at Frutarom were aware of such improper payments; (3) that, as a result, Frutarom’s financial results were materially overstated; (4) that, as a result of the improper payments, the Company was reasonably likely to face regulatory scrutiny; (5) that the Company had not completed adequate due diligence before acquiring Frutarom; (6) that, as a result of the foregoing, the Company was unlikely to achieve purported synergies from the acquisition; and (7) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On December 26, 2019, the Court issued an Order appointing Lead Plaintiffs and Counsel. Lead Plaintiffs filed an amended Complaint on March 16, 2020.