Rapid7 adds three new board directors in settlement with Jana Partners

NEW YORK (Reuters) - Cybersecurity company Rapid7 on Monday said it has reached an agreement with activist investor Jana Partners to add three new directors to its board, including one of the hedge fund's partners.

The Boston-based company named Wael Mohamed, Mike Burns and Kevin Galligan as new directors. Its board currently has eight members.

Rapid7 CEO Corey Thomas said the newcomers, who bring expertise in digital transformation, finance and operations and an investor's view, will "help us sharpen our strategy, strengthen execution and drive greater value creation for our shareholders."

Jana managing partner Scott Ostfeld called the engagement with the company "highly constructive" and said "we are encouraged by the steps Rapid7 is taking to enhance its leadership and execution capabilities."

Reuters reported on Sunday that the two sides were nearing a settlement to add three directors to the board after Jana and Rapid7 had discussed ways to boost the share price by improving operations and exploring a sale.

Boston-based Rapid7 specializes in so-called vulnerability management, providing software tools and services that help businesses assess and monitor security risks. The company has been forced to compete harder for business as corporate clients cut back on security spending due to broader economic uncertainty.

The company's stock price has tumbled 41% in the last 52 weeks and is down 28% this year, shrinking its market value to roughly $1.8 billion.

Jana owned 3.7 million shares, or a 5.8% stake in the company, according to a regulatory filing in March, LSEG data show.

Reuters reported in October that Rapid7 was exploring options with investment bankers after attracting acquisition interest from buyout firms, including Advent, Bain Capital and EQT.

(Reporting by Svea Herbst-Bayliss, Editing by Louise Heavens)