Drew Hill, and Dutch physical music distributor and manufacturer Artone, have concluded a deal to buy the assets of Proper Music Group Limited, securing the future of the UK’s leading physical distributor of independent music, CMU can exclusively reveal.
Today’s deal, which follows a competitive bidding process managed by leading business advisory and corporate strategy firm Eveyln Partners, represents a turning point in the history of Proper. Proper Music, a long established player in the UK’s physical music market, and which handles 13% of that market, was acquired by Utopia Music AG in 2022.
“I couldn’t quite let myself breathe that final sigh of relief until we signed the paperwork this morning... I’m full of optimism that having been on a three-year rollercoaster ride, the next phase feels like it’s going to be a very different one...”
Utopia, the now bankrupt Swiss music data/tech/AI/blockchain company that raised and blew an enormous amount of money, went on a wild acquisition spree, buying Proper and a number of other established music companies. It then collapsed in a scandal-ridden bankruptcy last year, which saw it leave a trail of destruction in its wake, including a string of bankrupt subsidiaries, lawsuits, and hundreds of staff left in the lurch.
As Utopia imploded, many in the UK physical music sector were increasingly nervous about the potential for Proper to be impacted and, as Swiss administrators took control of the asset of the former Utopia late last year, many stakeholders were worried that Proper might end up being sold off in a fire sale of assets via the Swiss bankruptcy courts.
“Drew is great; he’s sharp, he’s dedicated, but above all he’s just nice. And that counts for a lot...”
Today’s deal represents a triumphant resurrection of Proper Music, securing its future under new ownership that is heavily invested in the physical music space.
Hill, widely regarded as one of the most trusted figures in the UK music industry, has steered Proper through a challenging period under Utopia ownership. Throughout CMU’s coverage of the Utopia fallout, industry figures, when asked their opinions on Hill, have almost universally characterised him as a “straight-shooter” who “does what he says” and “has built a huge amount of trust and respect over many years in the industry”.
Perhaps the best endorsement of all was one partner of Proper who told CMU, “Drew is great; he’s sharp, he’s dedicated, but above all he’s just nice. And that counts for a lot”.
Hill has been praised for prioritising the needs of labels, clients, partners and staff through the turbulent period of Utopia’s ownership of Proper, and navigating the company through a hugely difficult period that has seen an onslaught of negative stories (and yes, many of them from CMU…) as parent company Utopia was hit by scandal and bankruptcy.
“A 'substantial' and 'knife-edge' bidding war... reached in a highly competitive process with several bidders interested in buying the business...”
In an exclusive interview with CMU as the deal concluded, Hill shared his optimism for the company after a tense and competitive bidding process. “Primarily, I’m relieved”, he says. “I couldn’t quite let myself breathe that final sigh of relief until we signed the paperwork this morning, but everything is done - the Ts are crossed and the Is are dotted, but we’re there now. But I think this is a really, really good outcome for the process we’ve been through. I’m full of optimism that having been on a three-year rollercoaster ride, the next phase feels like it’s going to be a very different one”.
Today’s deal follows the appointment of joint administrators to Proper Music Group, and comes after what several sources have described to CMU as a “substantial” and “knife-edge” bidding war. When asked about the price, Hill was reticent, admitting only that it was “substantial”. CMU understands that while the final price for Proper was not as much as Utopia paid - though Utopia was widely seen to have paid over the odds on many of its deals - it represents an accurate reflection of the value for Proper and was reached in a highly competitive process with several bidders interested in buying the business.
That acquisition process, says Hill, was conducted with full transparency and oversight via an independent administrator, following stringent UK administration protocols.
The administrators overseeing the process, Evelyn Partners, are the same firm that oversaw the administration of Utopia Distribution Services, the other UK-based physical distribution company owned by Utopia which grew out of an acquisition of the assets of what was Cinram Novum. “Evelyn Partners did the administration of UDS before Christmas”, says Hill.
Indeed, many sources close to the UDS deal expected to see UDS and Proper consolidate into one entity, with sources saying that Hill and a consortium of partners were in pole position to do a deal to acquire both companies.
Mark Supperstone, Partner at Evelyn Partners and joint administrator to PMG, says, “We are pleased to announce this sale which effectively secures the future of physical music distribution for independent labels in the UK. There was a high level of interest in acquiring the trading group and, having worked closely with Drew and his team for some time, we are pleased to complete the deal with Artone, who are able to offer many synergies that will enable the businesses to flourish in the years to come. We wish them all the best”.
The fact that UDS has ultimately ended up under the ownership of Dubai-backed DP World - a shock outcome that surprised many people CMU has spoken to - shows that no favours were being done and no punches pulled. CMU understands that the UK administrators have been communicating with the Swiss administrators overseeing bankruptcy of the former Utopia Music. “Our administrators have been liaising with them”, confirms Hill, describing how the Swiss administrators were kept informed at each stage of the process.
Today’s deal ensures that the future of physical distribution for the UK’s independent sector is not only secured, but secured under new ownership that understands and values physical music distribution, and the sanctity of the physical supply chain.
Gee Davy, CEO of AIM says that the joint acquisition by Artone and Hill is “fantastic news for the independent community, which overperforms in its share of the physical music market. Drew's eighteen years' experience at Proper combined with Artone's pan-European expertise will no doubt ensure that the UK's physical music sector continues to thrive”.
Kim Bayley, CEO of digital entertainment and retail association ERA adds, “Independent music is a crucial part of the UK's music ecosystem and the creative backbone of UK music. We are therefore delighted that the UK's leading indie distributor Proper Music will now enjoy a new life under the capable leadership of Drew Hill, in partnership with Artone”.
“We’ve been hit with all the shitty press associated with Utopia. Now people are seeing this news as great, we get out of the doom cloud...”
“Artone, through [its subsidiary] Bertus, is a longstanding commercial partner of Proper”, says Hill. “In fact, I think Bertus might actually be an older company than Proper Music Distribution. We’ve got a really deep relationship with them, they understand our business. We’ve been trading with Bertus ever since I’ve been at Proper, and long, long, long before that”, adds Hill.
“I think they’ve got a very similar history - if you wind the clock back to the beginning - of starting off as a wholesaler, and then becoming a distributor, and learning what the difference is between those two things. We share a lot of common clients already in terms of labels.
“Obviously, reputationally, we’ve been hit with all the shitty press associated with Utopia”, says Hill, “along with some pretty hard real-world facts that have come along with Utopia’s demise. But as far as the day-to-day business at Proper goes, we didn’t really change much".
Most people at the company's Dartford base, he adds, “knew that we were owned by Utopia, but beyond that initial flurry where they invited everyone to the huge Utopia party, everyone got over that pretty quickly.”
“Now people are seeing this news as great, we get out of the doom cloud surrounding Utopia and actually now we’re backed by a company that has got a long history of being in the physical distribution business, rather than with Utopia where it kind of felt like we were being held a bit on the outside, where it was like ‘OK, why have we bought this physical distributor? This has nothing to do with what we are building here, we’re looking at Fair Play For Every Play, but Proper is doing physical, what are they going to do with that?’”
“The difference now, with Artone, is that within the group they’ve got vinyl pressing, they’ve got their own physical distribution warehouse in Rotterdam, just last year they bought Townsend so they’ve got D2C capabilities. And unlike being bought by Utopia where even we were scratching our heads a bit saying ‘how do we fit into this picture?’, it’s so much easier to explain to the staff this time round, why Artone has come on board and where we fit into the plans for where they see the group going. So I’m full of optimism”.
Under the new ownership structure, Proper Music Distribution and its associated companies will be fully divorced from the bankrupt Swiss parent, and a new multi-year lease has also been secured for the Proper Music Distribution warehouse in Dartford.
“It’s worked out really well”, says Hill, on the new warehouse lease. “As you know, at one point it looked like ultimately Proper would be going to Bicester, with UDS and Proper in the big DP World warehouse with the robots and everything else”, says Hill. “Timing wise, this has worked really really well with the landlord. We had a problem with the floor in Dartford, the old landlord was saying they needed us to vacate to fix the floors, so one route was to go to Bicester, but then the trading estate we are on in Dartford was sold in December, and the new landlord has presented a plan to patch the floors, working around us, and we’ve agreed a five-year extension on the lease”.
“Erika Brennan has been right by my side all the way through this, it’s been a real team effort to make sure we got the right result...”
Key to navigating the past few years and negotiating the new deal for Proper, says Hill, has been a team of advisors and key staff who have supported him throughout the process. “We’ve had some really good advice from two different law firms”, says Hill. “I’ve always tried to make sure that if something’s not my particular area of expertise then I’ll make sure I surround myself with people who are experts”.
One of those experts is Erika Brennan, Proper’s Head Of Business Affairs. “Erika is my right hand woman”, says Hill, “She’s been right by my side all the way through this, and it’s been a real team effort to make sure we got the right result”.
“Even in the days where you’re sitting there thinking ‘oh god, this feels a little bit like it might come off the rails’ I just kept saying ‘we know what we’ve got and where we’ve got to get to, we’ve just got to keep pushing this through to the end’. It’s a bit of a crass analogy, but I’ve really felt like we’ve been in the trenches together, and I know that when push comes to shove every single person here is coming with me. That’s always been the spirit here, that we are all in it together, we’re a team”.
“I’m really pleased that we do all get to stay here together, because it never really sat easy with me that if we moved, then the people that had built this business with us here down at this warehouse may not be part of the future. Now I’m really up for this idea that we’re all going to be building this indie powerhouse together”.
Hill, who has been at the helm of Proper Music Distribution for eighteen years will remain its Managing Director, while also acquiring a stake in the business, giving him skin in the game in the future of the company.
The acquisition creates significant pan-European opportunities, building on successful collaborations already in place, including one with Nettwerk, the Canadian label group. “They were looking for a one-stop shop solution for Europe and the UK”, Hill explains. “Bertus came to us and said rather than us both going in and competing against each other, let’s go in with a joined-up pitch… it’s worked brilliantly well”.
This model for offering labels seamless access to both UK and European markets will be expanded. “That’s the sort of thing we want to be doing more of now - coming up with more ways of offering people this kind of one-stop shop”, says Hill, highlighting how the deal simplifies the distribution process for labels seeking international reach, including vertical integration opportunities through Artone’s diverse portfolio of companies.
In a market where physical formats continue to thrive, especially in the independent sector, Hill sees significant growth potential. “When you look at specifically the indie labels part of the overall physical business, that just seems to be increasing”.
According to ERA, physical music sales revenues in the UK reached £330.1 million in 2024, up 6.2% from 2023, with vinyl album sales growing at 10.5% to £196 million - faster than music streaming’s growth of 7.8%. With Proper Music Distribution’s 13% share of the UK physical music market and strong industry relationships, the company is well positioned to continue its vital role in the music ecosystem under its new ownership.
With the whole industry now focusing in on the superfan opportunity, there’s an increasing shift to helping artists maximise revenue from dedicated fans. “These days you don’t need to have a particularly big fanbase, you just need to work out how you monetise the fans you’ve got better, and I think one way of doing that is selling them more physical products”, Hill told CMU.
“If you want to get a fan to pay you fifty quid for a vinyl record, it’s got to be beautifully packaged and it’s got to have a real reason for existing. But if you do that, then you can find one thousand fans that might want to buy, or five hundred fans that might want to buy that fifty quid record”, he continues. “We’re a key part of that. We can do the heavy lifting, getting the product into those people’s hands”.
“We are no longer anything to do with Utopia... We're part of Artone. These guys are safe as houses. Now we're getting back to doing all the things we were doing before Utopia came along...”
This approach particularly benefits small independent labels who need operational support. “Most people that start a label or make a record don’t do it because they want to go to the post office and shove things in jiffy bags. I think that’s again, where we can help. That’s what makes our sales pitch so easy, we all know that nobody started a label because they want to do admin”.
“There are plenty of great label services companies out there that focus on the marketing, generating the fan base. But I think there are also a lot of people that just need a company like us to do the admin - whether that’s D2C fulfilment or getting things manufactured. That’s the stuff we’re really good at. It’s the donkey work, the boring stuff in the background, but the stuff that most creative people are not particularly good at or enjoy doing”.
In the immediate term, it will be business as usual. “I don’t think people will notice much that is different in the short term. The most important thing is getting the message out that we’re no longer anything to do with Utopia. We’ve now got a new owner that’s been in physical distribution for even longer than us, they’re leaving me and my team in charge, we’re staying in Dartford, and it’s back to doing what we’ve always done, but without this other stuff hanging over us”.
“We’ll continue to ship the boxes and do everything we do, it’s just going to be done without people looking over their shoulders wondering ‘Is this the week that Proper finally succumbs to the Utopia curse’. There are labels that we’re talking to just now, there are things happening in the wider industry where some people are looking at what’s happening and thinking the time is ripe to come over to a truly independent player like us”.
“Before when I’ve been having those conversations with the Utopia thing hanging over us, I can tell that they’ve been thinking it could be an ‘out of the frying pan into the fire’ situation. Now I can tell people ‘Utopia is over. We’re part of Artone, do your research, these guys are safe as houses’, and then I can get back to rebuilding the business. And rather than going after big fish, we’re going to do it like a rifle-shot - let’s go out and sign the labels that we really want to work with, and the ones that want to work with our indie powerhouse”.
For Hill, having skillfully navigated Proper through the challenges of the past three years, the future looks bright. “I’ve always held the belief that I’m looking after this thing that everyone relies on. Physical distribution is such an important part of the value chain, and I hope that people realise that I take that really, really seriously”, he reflects. “Everything I’ve done over the past two and half years has been about that, and now I’m at the point where we’re sailing back through calm waters into a safe harbour again. That’s what the deal with Artone means”.
As Hill wraps up - “I’ve got more DocuSign to click”, he says - the story of Proper Music is about looking forward, rather than back. “It’s getting back to doing all the things we were doing before Utopia came along”.