Despite PNC Financial Services Group's (NYSE:PNC) relatively small size (its market cap is roughly $16.4 billion), the company has been expanding itself as a diversified financial institution. Like a Mini-Me version of Citigroup (NYSE:C), PNC offers wealth management, asset management, and fund processing, among other services. Now it's entering the investment banking business as well.

This week, the firm announced that it will purchase Harris Williams & Co., a boutique advisory firm that focuses on mergers & acquisitions for middle-market companies. Founded in 1991, the firm has 110 employees and has offices in Richmond, Boston, and San Francisco. The deal's price tag was not disclosed, although PNC expects the acquisition to be immediately accretive to earnings.

On the face of it, the deal makes a lot of sense. The middle market already comprises a big chunk of PNC's customer base, and it appears middle-market M&A activity is picking up as founders get older and look to cash out. PNC could establish a tidy synergy by offering financial services to Harris Williams' clients.

In addition, PNC needs new growth avenues. The company's latest quarterly report was lackluster, with net income falling 7%. The company recently announced a restructuring that will involve laying off 3,000 employees.

Buying an investment bank is no easy feat. Major financial institutions have often failed in the past with purchases of firms like Montgomery Securities, Hambrecht & Quist, and Robertson Stephens.

In hopes of avoiding similar pitfalls, PNC stressed that it spent two months in extensive due diligence to form a structure that will hopefully reduce integration problems -- for example, Harris Williams will keep its name. For PNC, the bill will pose a new challenge: maintaining unbiased client/advisor relationships while still exercising some degree of control over the new division.

Fool contributor Tom Taulli does not own shares mentioned in this article.