As a young boy during Prohibition, Leo Cox helped his father bottle beer in the family's Detroit basement. The experience wasn't pleasant, and Cox swore off drinking until his 50s. Then fate intervened. As a nuclear engineer working for Bechtel, Cox was transferred to Spain in 1977. He promptly fell in love with wine. "After my first sip, I immediately wondered what I had been missing my whole life," says Cox.
He vowed to start a winery one day. But when he retired, in 1987, he couldn't find affordable land in California or Oregon. He hadn't considered Arizona. Then, on a trip to Arizona to visit his daughter, Cox stumbled on a 10-acre plot. He tested the soil. Both it and the climate -- hot days and cool nights, not unlike those of Spain -- were ideal.
Cox planted his first 450 vines in 1995. By 1999, he had his first vintage of white Merlot, which he sold at a local tasting under the label of Charron Vineyards, named after the maiden name of his wife, Rhea. The bottles sold quickly, and Cox has since sold every bottle he has produced. Now 83, Cox wants to hand off the business to someone who can finish what he started. "If I were 20 years younger, I could increase capacity by 300 percent," he says.
PRICE RATIONALE: At 11 times revenue, the price is a bit high for a small winery, says Neil Shroff, managing director of Orion Capital Group in Menlo Park, California. A more typical price would be eight or nine times revenue. Cox says he is basing the price on the vineyard's expansion potential.
THE PROS: Arizona winery prices are relatively low. "A comparable winery in California would cost at least at twice as much," says Vic Motto, CEO of Global Wine Partners, an investment bank in San Francisco. The Arizona wine industry has grown from six wineries in the early 1990s to about 39 today.
THE CONS: The business lacks significant retail distribution channels, which could limit expansion. Cox, whose knee injury last year caused production to fall, relies on volunteers to keep costs low. A new owner might not be so lucky.
THE BOTTOM LINE: Charron Vineyards makes an excellent lifestyle business, says Motto. Cox says his equipment and facilities can support at least three times current production if the vineyard is expanded to its full 10 acres.