Shares of Magellan Health Inc. (NASDAQ: MGLN) traded up about 2.7% Thursday morning after a report in Wednesday’s Wall Street Journal that the pharmacy benefit management (PBM) and behavioral health company is in discussions with private equity firm Centerbridge Partners about a possible acquisition.

In late March, Magellan agreed to a demand from hedge fund Starboard Value to name four new independent directors to its board and to form a committee of its independent directors to perform a strategic review of the company. Starboard owned about 10% of Magellan’s outstanding stock at the time.

Magellan’s 2018 revenues were 25% higher than in 2017, but net income plunged 78% year over year. The adjusted loss per share was $0.77, a drop of 58% year over year. In the first quarter of this year, revenues were down 3.6% and net income was down 96%. Adjusted profit per share was down by 51% to $0.40.

The company cited cost pressure, rate reductions and unfavorable rate adjustments as the cause of its problems in 2018. In the first quarter, profits in the health care segment were modest, but the PBM business segment profit fell from $15.5 million a year ago to $8.3 million as Magellan lost management contracts and PBM membership fell.

The mega-mergers in the health care business didn’t help. CVS Health Corp. (NYSE: CVS) paid $69 billion for Aetna, and Cigna Corp. (NYSE: CI) paid $52 billion for PBM firm Express Scripts. Magellan, which is valued at around $1.7 billion, tried to use its independent status as a wedge with customers who believed that the giant firms were gaining too much pricing power. That very pricing power is likely what is driving Magellan into a potential sale to Centerbridge.

Is Centerbridge likely to hold onto Magellan’s assets or sell them off piecemeal? Most investors probably think so, but Centerbridge might have other plans. Late last year the firm acquired home- and community-based services provider Civitas Solutions, adding to its Versant Health managed eye health and vision care plan. It could be that Magellan’s appeal resonated with customers looking for alternatives to the giants, and adding a PBM and behavioral health business allows Centerbridge to cast a wider net for those customers.

Magellan’s shares added 7.3% late in the day Wednesday to close at $70.56, and they had added about 2.8% so far Thursday to trade at around $72.50. The stock’s 52-week range is $51.88 to $99.78, and the consensus 12-month price target is $76.75.

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