Alkane Energy specialises in using methane from abandoned coal mines to generate electricity. It has a total of 145MW of installed generating capacity and an electricity grid capacity of 160MW.
The £61m offer from Balfour Beatty Infrastructure Partners (BBIP) is already backed by more than 35% of Alkane shareholders and the board is recommending the rest support the deal and take the money.
BBIP managing partner Rob Gregor said: "BBIP is attracted to the flexibility and diversification of generation provided by the independent power platform of Alkane. We see great opportunity in the business and believe BBIP is an excellent partner to support the next phase of Alkane's development, and thereby contribute to the security of the UK power supply."
In its annual results for the year ended 31st December 2014, Alkane reported revenue of £16.0m, gross profit of £6.5m and a profit before tax of £3.2m. For the six months ended 30th June 2015 it generated revenue of £8.7m, gross profit of £3.7m and a profit before tax of £1.4m.