Rapid7 adds 3 new directors to its board of directors as part of a settlement with Jana Partners

Rapid7, a cybersecurity company, announced on Monday that it had reached an agreement with activist investors Jana Partners for three new board members to be added to its team. One of these directors is a partner in the hedge fund.

Wael Mohammed, Mike Burns, and Kevin Galligan were named as the new directors of a Boston-based firm. The board has eight members.

Rapid7 CEO Corey Thomas stated that the newcomers will help "sharpen our strategy, strengthen our execution, and drive greater shareholder value creation."

Scott Ostfeld, managing partner of Jana, called the engagement "highly productive" and stated that "we are encouraged by Rapid7's steps to enhance its leadership capabilities and execution capability."

Reports on Sunday indicated that both sides were close to a settlement for the addition of three directors to Rapid7's board. This was after Jana had met with Rapid7 to discuss ways to increase the share price through improving operations and examining a possible sale.

Rapid7, a Boston-based company, specializes in vulnerability management. It provides software tools and services to help businesses monitor and assess security risks. Due to the economic uncertainty, corporate clients are cutting back on their security budgets. This has forced Rapid7 to compete more aggressively for new business.

The stock price of the company has fallen by 41% over the past 52 weeks, and 28% in this year. This has reduced its market value from $1.8 billion to approximately $1.8 billion.

LSEG data shows that Jana held 3.7 million shares or a 5.8% share in the company according to a March regulatory filing.

In October, it was reported that Rapid7 had been exploring options with investment banks after attracting interest from acquisition firms such as Advent, Bain Capital, and EQT.

(source: Reuters)