Investing.com - Jana Partners, an activist investor known for successfully advocating the sale of several companies, has acquired a stake in cybersecurity firm Rapid7 Inc (NASDAQ:RPD) and is encouraging the company to consider a sale, according to a source close to the matter.
This development comes several months after it was reported in 2023 that the Boston-based company was considering various options, including a potential sale.
Upon the revelation of Jana's involvement, which was initially reported by the Wall Street Journal, Rapid7's stock price rose more than 8% in midday trading on Wednesday. The investment was discussed by Scott Ostfeld, Jana Partners' managing partner and portfolio manager, at an investment conference held in Monaco.
Rapid7's stock price has seen a 25% decrease since January. In addition to advocating for a sale, Jana is also urging the company to enhance its operations and forecasting. The company recently downgraded its outlook for 2024.
Rapid7 is known for its specialization in vulnerability management, offering software tools and services that aid businesses in assessing and monitoring security risks. The company has had to intensify its competitive efforts as corporate clients have reduced their spending.
The hedge fund is collaborating with Cannae Holdings, a publicly traded holding company, with the proposal being for Cannae to team up with a private equity firm to purchase Rapid7.
In the past, Jana has successfully advocated for the sale of companies like New Relic, which was taken private by TPG and Francisco Partners last year, and Zendesk, which was taken private in 2022 by investment firms led by Hellman & Friedman