- Details
- By Chez Oxendine
- Economic Development
The investment arm of the Santa Ynez Band of Chumash Indians has bolstered its defense holdings with the acquisition of Capco LLC, a Grand Junction, Colo.-based military device provider.
Chumash Capital Investments, the investment arm of the tribe’s Chumash Enterprises, finalized the deal on July 2 with Capco Growth Partners LLC, the company’s former private equity owners.
Founded 53 years ago, Capco is a vertically integrated manufacturer of engineered mechanical, cartridge-actuated and propellant-actuated devices and serves as a prime defense contractor. The company, which operates from a 100,000-square-foot and employs more than 300 people, produces high-volume energetic devices for airborne countermeasure systems.
Capco’s products include the M320 40mm grenade launcher, mounts for lightweight machine guns, non-lethal options for law enforcement officers, and initiators for rockets and missiles.
In addition to defense, the company also serves the law enforcement, aerospace and oil and gas industries.
“We are proud to welcome Capco, a leader in its field, to CCI, the investment arm of Chumash Enterprises,” John Elliott, CEO of Santa Ynez, Calif.-based Chumash Enterprises, said in a statement to Tribal Business News. “This acquisition gives the Santa Ynez Band of Chumash Indians the opportunity to help Capco continuously improve and achieve new heights, while also further diversifying the tribe’s investment portfolio.”
Terms of the deal were not disclosed.
Capco CEO Cordell Bennigson told the local The Daily Sentinel that the company’s leadership team will remain in place under the new ownership, who he said planned investments in continuous improvement and modernization at the Grand Junction facility.
“Like our entire team, the Chumash take great pride in the important work Capco does every day,” Bennigson said in a statement announcing the deal. “They are committed to maintaining the culture and quality reputation Capco has built while supporting new opportunities for growth, expansion, and modernization.”
The Capco acquisition marks the latest addition to a growing portfolio under Chumash Capital Investments as the tribe continues to diversify its business interests.
Previously, Chumash Capital Investments acquired Naples, Fla.-based specialty firearms components manufacturer Azimuth Technology LLC in August 2020, as Tribal Business News previously reported.
At the time, Elliott said the investment in the defense sector provided “an attractive counterbalance” to Chumash Capital’s other investments in the hospitality and leisure industry.
Other economic development ventures for the Santa Ynez Band of Chumash Indians include Chumash Casino Resort; the boutique 122-room Hotel Corque, 71-room European-inspired Hadsten House Inn, and the Root 246 restaurant in Solvang; and Kitá Wines, a small vineyard and winery that produces 2,000 cases annually in the Santa Ynez Valley.
By investing in defense contracting, Chumash Capital is jumping into a relatively stable and slow-growing sector, according to a 2021 outlook from Deloitte, a global audit, consulting, financial advisory, risk management and tax services firm. That outlook calculates a 2.8 percent annual increase in global defense spending, which is expected to eclipse the $2 trillion threshold this year.
With a stable market ahead and a new defense company under its belt, Chumash Capital hopes to further diversify its holdings as well as help Capco expand, Elliott told Tribal Business News.
“We look forward to building upon Capco’s success as an industry leader and creating a bright future together,” Elliott said.
In the Capco deal, Chumash Capital Investments was advised by merchant banking firm Horizon Business Advisors LLC and the law firm of Holland & Knight LLP.
Investment banking firm Houlihan Lokey Inc. served as the exclusive financial adviser to Capco, which was advised by the Denver-based law firm Davis Graham & Stubbs LLP.
