By Svea Herbst-Bayliss
NEW YORK (Reuters) – Jana Partners, the activist investor that has successfully pushed for the sale of multiple companies, has built a stake in Rapid7 and is urging the cybersecurity company to sell itself, a person familiar with the matter said on Wednesday.
The news of Jana’s stake comes months after Reuters reported in 2023 that the Boston-headquartered company was exploring options that included a possible sale.
News of Jana’s involvement, first reported by the Wall Street Journal, pushed Rapid7’s stock price up more than 8% in midday trading on Wednesday. Jana Partners managing partner and portfolio manager Scott Ostfeld discussed the investment at an investment conference in Monaco.
Since January, the stock price has tumbled 25%.
Besides urging a sale, Jana is also pushing the company to improve operations and forecasting. It recently reduced its 2024 outlook.
Rapid7 specializes in so-called vulnerability management, providing software tools and services that help businesses assess and monitor security risks. It has been forced to compete harder for its business as corporate clients cut down on spending.
The hedge fund is working with Cannae Holdings, a publicly traded holding company, and the idea would be for Cannae to partner with a private equity firm to buy Rapid7.
Jana previously pushed for a sale of New Relic which was taken private by TPG and Francisco Partners last year. It also pushed for a sale of Zendesk which was taken private in 2022 by investment firms led by Hellman & Friedman and Permira.
(Reporting by Svea Herbst-Bayliss; Editing by Josie Kao)
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