Rapid7 is nearing a settlement with activist investor Jana Partners after the two parties discussed strategies to enhance the company's share price by improving operations and exploring a potential sale, according to sources familiar with the matter.
Under the proposed terms, three new members would join the existing eight-member board. An agreement could be announced as soon as Monday, although the situation remains dynamic.
Jana Partners did not provide any comments, and representatives for Rapid7 also did not respond to requests for comment.
Based in Boston, Rapid7 specializes in vulnerability management, offering software tools and services that help businesses assess and monitor security risks. The company has faced increased competition as corporate clients reduce security spending amid broader macroeconomic uncertainty.
Rapid7's stock price has decreased by 41% over the past year and is down 28% this year, reducing its market value to approximately $1.8 billion.
As of March, Jana owned 3.7 million shares, representing a 5.8% stake in the company, according to a regulatory filing.
In October, it was reported that Rapid7 was in discussions with investment bankers after attracting interest from buyout firms, including Advent, Bain Capital, and EQT.
Industry data reveals that in 2024, activist investors gained 119 board seats at various companies, with 76% of these positions secured through settlements.