Rapid7 explores sale as buyout firms show interest

Pressure from activist investors has pushed Rapid7 to consider acquisition possibilities.

Rapid7 exploring acquisition options

Boston-based cybersecurity company Rapid7, valued at roughly $2.5 billion, is exploring acquisition options after attracting interest from private equity firms. Working with investment advisors Goldman Sachs and JPMorgan, the firm is reportedly in early discussions with major private equity groups, including Advent, Bain Capital, and EQT. Sources suggest that while talks are ongoing, Rapid7 may ultimately decide against a sale.

The company, a provider of vulnerability management tools helping organisations assess and monitor cybersecurity risks, has been under increased pressure to consider a sale. Activist investor Jana Partners recently acquired a 5.8% stake in Rapid7, urging it to explore strategic options as it faces strong competition from larger players like Tenable and Qualys.

Rapid7 has seen its shares fall around 32% this year amid rising challenges in the cybersecurity market, as clients cut back on spending due to economic pressures. However, news of a potential sale lifted the company’s stock by over 4% on Monday. Interest in cybersecurity acquisitions remains strong, with private equity firms actively pursuing opportunities in the sector, highlighted by major deals such as Advent’s $14 billion acquisition of McAfee in 2021 and Vista Equity’s $4.6 billion buyout of KnowBe4 last year.