Cybersecurity company Rapid7 has reached an agreement with activist investor Jana Partners to add three new directors to its board, including one of the hedge fund's partners. The new directors are Wael Mohamed, Mike Burns, and Kevin Galligan, joining a board that currently has eight members.
Rapid7 CEO Corey Thomas stated that the new additions, with their expertise in digital transformation, finance, and operations, along with an investor's perspective, will help refine the company’s strategy, enhance execution, and drive greater value for shareholders.
Jana managing partner Scott Ostfeld described the engagement as "highly constructive" and expressed optimism about the steps Rapid7 is taking to improve its leadership and operational capabilities.
The decision to expand the board comes after discussions between Rapid7 and Jana focused on strategies to boost the company's share price through operational improvements and the possibility of a sale.
Based in Boston, Rapid7 specializes in vulnerability management, offering software tools and services that assist businesses in assessing and monitoring security risks. The company faces increased competition as corporate clients reduce security spending amid economic uncertainty.
Rapid7’s stock price has declined by 41% over the past year and is down 28% in 2023, resulting in a market value of approximately $1.8 billion. Jana holds 3.7 million shares, representing a 5.8% stake in the company, according to a regulatory filing.
Options for investment bankers were explored last October after the company received interest from buyout firms, including Advent, Bain Capital, and EQT.