TORONTO (Reuters) - The investment banking arm of Royal Bank of Canada RY.TO plans to acquire Houston-based energy advisory firm Richardson Barr & Co, bolstering its U.S. business as oil prices are soaring and private asset sales may be on the upswing.

A Royal Bank of Canada (RBC) logo is seen at a branch in Toronto November 9, 2007. REUTERS/Mark Blinch

RBC Capital Markets, which focuses on middle-market companies in its investment banking business, said on Monday that it is buying Richardson Barr, which was founded in 2003 and advises exploration and production companies on acquisitions and divestitures. Terms were not disclosed.

Richardson Barr targets corporate and asset transactions valued at $50 million to $1 billion, according to its website. Services include private oil and gas company sales, oil and gas asset divestitures, and fairness opinions and valuations.

“What you’ve seen is a steady increase in the total asset and divestiture work that’s gone on in the United States,” Peter de Vos, RBC Capital Markets’ head of U.S. investment banking, told Reuters.

That business has “a fairly high correlation” with the oil price, de Vos said. In addition, sales of private oil and gas assets are expected to increase in the next year or so for tax reasons.

“Many people believe that a new president would be likely to raise capital gains tax rates,” he said.

“That’s an area that Richardson Barr focuses on, so we think, particularly with wealthy families that own parcels of land, that they might be more likely to sell between now and the time that tax rates are changed.”

Richardson Barr said it will be able to provide a broader range of financing and merger and acquisition services to its private-company clients when the deal closes, which is expected in the third quarter.

As for RBC Capital Markets, the deal brings experienced engineers, geologists and finance professionals to its energy group, which is already the largest unit within the U.S. investment bank, de Vos said.

RBC intends to keep expanding its energy group, and is also looking to build up its U.S. industrial and consumer expertise, he added.