Activist investor Jana Partners LLC has taken a stake in cybersecurity solutions provider Rapid7 Inc. and is reportly planning to push the company to sell itself.

Jana’s managing partner, Scott Ostfelf, unveiled the investment today and, while not saying how many shares the investment firm had acquired, described Jana’s shareholding as “significant.” The Wall Street Journal, citing people familiar with the matter, reported that Jana is working with investment firm Cannae Holdings Inc. to sell the company.

In addition, the Journal’s sources claim that Jana is also pushing for Rapid7 to make other changes to boost its stock price, including improving operations and forecasting.

Jana is an investment firm best known for its activist investing strategies. The firm typically invests in companies it believes are undervalued and advocates for changes in business strategy to management to increase shareholder value.

Cannae is a diversified holding company that acquires and manages businesses in various industries, including tech, healthcare and financial services. The company focuses on long-term value creation by partnering with management teams to develop, manage and grow their businesses.

The entry of Jana into Rapid7’s share registry comes as the company has struggled amid increased competition in the cybersecurity industry. Rapid7 shares are down around 25% since January, although they were up almost 7% in regular trading today once the news of Jana’s interest in the company became publicly known.

Founded in 2000, Rapid7 provides analytics and automation solutions to help organizations secure their information technology environments and respond to cyberthreats. The company’s products include vulnerability management, application security, incident detection and response, which are designed to simplify complex security processes and enhance IT and security operations.

Potential buyers for Rapid7, which has a market cap of $2.53 billion as of today, are many, with consolidation among cybersecurity companies being an increasing trend over the last year or so. One company Jana went after, New Relic Inc., was sold to Francisco Partners Management LP and TPG Inc. last year for $6.5 billion.

Other notable acquisitions over $1 billion in the industry include TPG’s acquisition of Forcepoint LLC for $2.45 billion in July 2023 and Francisco Partners’ acquisition of Sumo Logic for $1.7 billion in May 2023.

It wouldn’t come as a surprise if either of those firms, individually or jointly, makes a play for Rapid7 if it does come onto the market. The idea that Rapid7 could be on the table in a sale isn’t new either: Reports that Rapid7 was exploring a sale first emerged in February 2023.

Image: Rapid7