Bacardi, 42 Below in $138m cocktail

42 Below's Geoff Ross, left, and Bacardi's Atul Vora toast the sale announcement yesterday. Picture / Martin Sykes

Geoff Ross is set to walk away with more than $30 million from the sale of his vodka company 42 Below to global liquor firm Bacardi.

"It shows that we can create all sorts of great New Zealand businesses here - not just meat carcasses and milk powder," Ross, 39, one of the firm's founders, said yesterday.

Bermuda-headquartered Bacardi's $138 million, 77c-a-share offer for listed 42 Below - due to be mailed out in November - was unveiled yesterday. It covers the existing shares and any from warrants exercised at 50c a share.

The offer price compares with Tuesday's price of 57c and a high of 71c in the past year. The company's shares listed three years ago at 50c, valuing 42 Below then at $60 million.

Bacardi's move comes despite 42 Below never being in the black as, said Ross, it invested for growth rather than declaring annual profits.

He said the firm had $10 million cash in the bank. "We could turn the business to profit tomorrow, which may please the market but it would slow the growth."

Former advertising executive Ross - who held yesterday's press conference in the Auckland Hilton's bar and served potent cocktails - built the 42 Below brand through irreverent advertising and cheeky public relations.

Its promotional antics included a viral ad pulled after actor Russell Crowe complained, and New York street posters that prompted complaints from the Colombian Embassy.

Ross said operations would remain in New Zealand - and the 28 employees would stay on.

Bacardi saw 42 Below as a long-term investment which would not start to make money for about five years, he said. While 42 Below had been planning to scale back investment in the next few years, Bacardi planned to "put the foot down".

Bacardi would use its resources to get 42 Below products to more than 130 countries, compared with 25 now.

Ross jointly holds more than 39 million shares and nearly 7 million warrants in 42 Below. He and fellow founders Grant Baker and Stephen Sinclair, with substantial shareholder David Wright - who collectively hold 53 per cent of shares with related parties - have committed to the offer.

Ross confirmed he and related parties would gross more than $30 million from the sale. Baker and Sinclair and their related parties look set to gross more than $18 million and $4 million respectively.

That compares with the almost $3 million they invested in the company before its float three years ago.

Shareholders who bought into the original float at 50c a share and exercised all their warrants stood to make a 68 per cent return, Ross said.