National Bank Financial Inc. has entered into a definitive agreement to acquire the U.S. based investment bank Putnam Lovell Group Inc. The deal has been in the works for some time, but no price was disclosed.

Putnam Lovell is an investment boutique with a global practice in mergers and acquisitions, structured finance, equity research, equity sales and trading and private equity, all focused on the financial services industry. Putnam Lovell has offices in New York City, San Francisco, Los Angeles and London, England.

Executives from National Bank Financial and Putnam Lovell fleshed out the thinking behind their deal during a conference call this morning. They refused to disclose a price for the acquisition, but they did say it is a two-pronged deal with a fixed amount to be paid over time, and a variable performance-based component.

Kym Anthony, president and CEO of NBF, said that the deal would be accretive immediately, but at a non-material level of just a “couple of million dollars” in the first year.

Putnam Lovell decided to seek a strategic partner nine months ago. Donald Putnam, chairman and CEO of the firm, says that a couple of months ago his firm decided to go with NBF. Since then, it has spent time ironing out financial details, such as gettting approval from Caisse Populaire Desjardins, which owns a chunk of Putnam through a convertible debenture. Anthony confirms that the Caisse has agreed to sell.

Putnam will continue to run his business and will report to Anthony. The heads of equity research and trading will report to their counterparts at NBF. The only change this deal will bring for NBF clients is access to research on 100 financial institutions from Putnam.

The firm’s strategy, says Anthony, is to become global players in two or three key sectors. It may grow into these businesses by further acquisitions, or by wooing key teams from rival investment banks, he suggested. Putnam executives echoed this, suggesting that the era of the boutique investment bank is ending, to be replaced by specialty firms in focused niches.

The acquisition is expected to close in May 2002 and is subject to the receipt of customary regulatory approvals.