Houlihan Lokey, an international investment bank, has acquired a Washington, D.C- based small independent advisory firm - Milestone Advisors, LLC.

Milestone focuses on mergers and acquisitions, corporate finance, asset valuation and sale advisory services.

"Milestone's core competencies, comprising M&A advisory, capital raising, restructuring and asset sales and valuation, could not be a more perfect complement to Houlihan Lokey's business platform and our approach to client service," said Mr. Bob Hotz, senior managing director and co-head of corporate finance, Houlihan Lokey, in a press statement.

Hotz said that the acquisition will help expand the company not only in corporate finance, but also in financial restructuring and financial advisory services as well.

In addition, the alliance can provide significant benefits and opportunities for clients of both firms. Both the companies together have closed nearly 500 transactions valued at more than $400 billion since 2001.

For the acquisition, lawyers from Manatt, Phelps & Phillips LLP represented Houlihan Lokey, while Baker Botts, L.L.P. represented Milestone, The Wall Street Journal reported.

"The financial services industry is a substantial and integral component of the broader U.S. economy, with its own unique challenges that require dedicated sector expertise," said Michael McMahon, managing director and currently head of financial institutions within corporate finance, Houlihan Lokey. "This acquisition more than triples the number of professionals focused on providing advisory services to financial institutions for Houlihan Lokey." 

There have been some other recent acquisitions of small time financial companies. Stifel Financial, a mid-sized investment bank acquired KBW (Keefe, Bruyette and Wood) for about $575 million and Leucadia National purchased Jeffries for $3.6 billion.

According to The Financial Times, another private equity firm Carlyle is all set to acquire Duff & Phelps for $665.5 million.

Banks are branching out and have started dabbling in mergers and acquisitions to overcome the slew of restrictions that prevent them from making profits in these difficult times.

The banking sector in the U.S. comprises of around 7,000 institutions.

"In both the U.S. and Europe the amount of deal flow being discussed is striking for potential asset sales/divestitures. We are seeing no shortage in available capital sources to facilitate those transactions," McMahon told the Financial News.

Europe's mergers and acquisitions transactions were valued at $111.3 billion last year, an 8 percent increase from 2011.