PMI Playbook: Day 1 to Day 365

Executive summary

A post-merger integration playbook (PMI playbook) is a sequenced plan for turning a signed deal into an operating company: who runs what on Day 1, which workstreams deliver which results, and how you prove the deal thesis is being delivered. The core claim of this playbook is simple. Synergy is realized in the tracking, not the model. The model says what could happen. Only a ledger that connects each synergy to an owner, an action, a date, and a number in the P&L tells you what did happen.

The size of the prize is a formula, not a statistic: run-rate synergy in the deal model, minus what is never executed, minus what is executed but never reaches EBITDA, minus one-time cost to achieve. Each of those subtractions is invisible unless somebody is counting. The worked example below shows an illustrative integration where a $3.5M run-rate model becomes $1.95M executed and $0.88M of in-year EBITDA at Day 365, and the gap is explainable line by line only because the tracking existed.

The first move is not an integration kickoff deck. It is writing down, before Day 1, the baseline each synergy will be measured against and the person who will sign off that it is real.

When to use this

Use this playbook when:

• You are an operating partner, CFO, or CEO of an acquirer, a platform, or a carve-out buyer, with a signed or nearly signed deal.
• A buy-and-build platform is absorbing add-ons and each one needs the same repeatable process.
• The deal thesis includes cost or revenue synergies that somebody will be asked to prove to a board, a lender, or an investment committee.
• Integration is already underway and nobody can say how much of the synergy case has been realized.

Do not use it as a substitute for your legal, tax, benefits, and employment advisers. Day 1 involves contractual, regulatory, and employment obligations that depend on your agreements and jurisdictions. This playbook sets the operating structure around those obligations; counsel and your advisers decide what the obligations are.

It is also not the right tool for a pure financial holding with no operating integration. If the businesses will stay separate, track the portfolio view in a reporting package and skip the integration workstreams.

Diagnostic questions

Answer these before committing a plan. Most can be answered from the deal model, the purchase agreement, and a day with the two finance teams.

1. What are the specific synergies in the deal model, listed individually with an amount, a type (cost or revenue), and a timing assumption? If the model has one "synergies" line, you cannot track it.
2. For each synergy, what is the baseline it is measured against, and is that baseline frozen and written down?
3. Who is the named owner of each synergy? Is that person in the integrated business, not only on the deal team?
4. What one-time costs does the model assume to achieve each synergy, and are they budgeted by owner?
5. Which synergies depend on another workstream finishing first (for example, vendor consolidation depends on a combined spend view)?
6. Which systems must work on Day 1 for payroll, cash collection, and payments, and who confirmed it works?
7. What does the Transition Services Agreement (TSA), if any, cover, what does it cost, and when does each service end?
8. Which customers, suppliers, and employees are most at risk of leaving in the first 100 days, and who owns each relationship?
9. Do both companies close their books on the same calendar and policies, and can you produce a combined monthly P&L within a stated number of days?
10. Who decides when two practices conflict (pricing approval, credit terms, capital approval), and is it written down?
11. How will the board or investment committee see integration progress, and does that view reconcile to the general ledger?
12. Which lender, customer, or regulatory consents or notices are required, and who tracks them?

Reading the answers: if questions 1 to 3 cannot be answered, the first 30 days are about the synergy ledger, not the kickoff. If question 6 is unclear, Day 1 readiness comes before everything else.

The framework: six workstreams and one ledger

Integration plans fail in two ways: too many workstreams with no owners, or a few workstreams with no way to see whether they delivered. This framework uses six workstreams and one cross-cutting ledger.

The ledger sits across all six. It is the synergy ledger: one row per synergy initiative, carrying the owner, baseline, stage, run-rate, in-period EBITDA, cost to achieve, and evidence. Each workstream feeds it; the integration lead reviews it; the CFO signs off the numbers. The method for building it is covered in detail in Synergy Tracking: From Model to Realized EBITDA. Workstream structure and meeting rhythm are covered in Integration Management Office (IMO) Setup.

The five stages of a synergy

Every synergy moves through the same stages, and each stage needs different evidence. Counting a synergy at the wrong stage is the single most common way integration reporting overstates progress.

The deal model usually reports stage 1 values. The board wants stage 5 values. Everything in between is the work.

Step-by-step: Day 1 to Day 365

The calendar below assumes a signed deal with a closing date. If you are pre-signing, steps in the first block can start under confidentiality rules your counsel sets.

Before Day 1 (signing to close)

1. Decompose the deal model. Break the synergy case into individual initiatives, each with a type, a dollar amount, a driver (volume, price, headcount, square feet), and a timing assumption. Owner: deal team lead with the CFO. Output: initiative list that sums to the model total.
2. Freeze baselines. Agree the period, data source, and adjustments that each synergy will be measured against (for example, trailing twelve months of spend by category at current volumes). Owner: CFO. Output: baseline sheet signed by the owners.
3. Name owners. Every initiative gets one accountable person inside the combined business. Owner: CEO. Output: owner column complete, no initiative owned by "the team."
4. Run Day 1 readiness. Work through the Day 1 readiness checklist: payroll, cash, payments, authority, communications, customer and supplier continuity. Owner: integration lead. Output: readiness register with a go or no-go for each item.
5. Set up the IMO. Appoint the integration lead, agree the weekly and monthly cadence, and stand up the decisions log. Owner: CEO. Output: charter, calendar, and an issue-escalation path.
6. Agree the TSA scope and exit plan if there is a carve-out. Owner: CIO and CFO, with counsel on the agreement itself. Output: service list with owners, cost, and planned exit date for each service. See TSA management.

Day 1 to Day 30: stabilize

7. Keep the business running. Confirm payroll ran, cash was collected and applied, suppliers were paid. Owner: CFO. Output: Day 1 and week 1 exceptions list, closed out daily.
8. Communicate to each audience. Employees, customers, suppliers, lenders. Owner: CEO with HR and commercial leads; legal reviews anything with contractual or regulatory content. Output: sent messages and a Q&A log.
9. Protect key people and key accounts. Reach out personally to the people and customers named in the diagnostic. Owner: CEO and workstream leads. Output: named contact, date, and open concerns for each.
10. Validate the synergy ledger. Each owner confirms or revises the model amount bottom-up. Initiatives that cannot be validated move to a "challenged" list for the CEO and board, not quietly kept in the total. Owner: integration lead. Output: validated ledger and a variance to the model.
11. Produce the first combined view. Even if rough: combined cash, combined revenue by customer, combined headcount. Owner: CFO. Output: a one-page flash, reconciled to each entity's ledger.

Day 31 to Day 100: design and start executing

12. Decide the operating model. Org structure, decision rights, pricing and credit authority, capital approval limits. Owner: CEO. Output: written decision rights, communicated.
13. Launch the quick-win synergies. Choose the initiatives that are fastest, lowest risk, and fully within one owner's control, such as duplicate subscriptions or overlapping insurance. Owner: initiative owners. Output: executed stage, documented.
14. Start the long-lead initiatives. Vendor consolidation, facility moves, and system changes need data and lead time. Start the analysis now (see Vendor Consolidation Playbook). Owner: COO and CIO. Output: plans with milestones and cost to achieve.
15. Align accounting policies and close. Map charts of accounts, align revenue recognition and reserve policies in consultation with your auditors, and set a combined close calendar. Owner: Controller. Output: policy memo and close calendar. Accounting policy decisions belong to your finance leadership and auditors, not to this playbook.
16. Hold the 100-day review. Review ledger by stage, retention results, Day 1 exceptions, and TSA progress; reset the plan. Owner: CEO and board or sponsor. Output: updated plan; decisions logged.

Day 101 to Day 365: deliver and prove

17. Execute the large initiatives. Contract renegotiations, site consolidations, system cutovers, organizational changes. Owner: initiative owners. Output: stage 3 evidence with dates.
18. Measure realization monthly. Each month, finance recomputes stage 4 and stage 5 values from invoice, payroll, order, and GL data against the frozen baselines. Owner: FP&A. Output: ledger update and a model-to-realized bridge.
19. Exit the TSA on schedule. Track each service to its end date and the cost of any extension. Owner: CIO. Output: service exit confirmations.
20. Close the loop on cost to achieve. One-time costs are tracked against budget by initiative, because a synergy that costs more than it returns is a result, not a rounding error. Owner: CFO. Output: cost-to-achieve report.
21. Run the Day 365 review. Compare model, executed, run-rate, and in-period EBITDA by initiative. Decide what to keep pursuing, what to restate, and what to retire. Owner: CEO and board. Output: signed-off bridge and a lessons list for the next add-on.

Templates

Synergy ledger (copy into a spreadsheet)

Integration decisions log

The last two columns matter most. A decision without an expected outcome and a review date cannot be learned from.

Weekly integration review agenda (45 minutes)

1. Red items from the readiness or milestone register, owner and unblock needed (10 min).
2. Synergy ledger movement: new stage 3 evidence, slipped dates, challenged items (10 min).
3. People and customer risk: key-person and key-account contact status (10 min).
4. TSA and technology: services at risk, cutover dates (5 min).
5. Decisions needed this week, and decisions due for outcome review (10 min).

Day 365 bridge (model to realized)

Metrics and KPIs

Setting targets without invented benchmarks. Do not borrow a "typical synergy capture rate" from an article. Set targets from three anchors: the validated bottom-up amount for each initiative (not the top-down model), contractual dates and floors (TSA end dates, lease terms, supplier contract expiries), and your own prior integrations if you have them. For a first integration, the target is the validated ledger, reviewed monthly, with explicit dates. Targets for retention come from the named list, not a percentage.

Common mistakes

1. Tracking the model total. Symptom: the board slide shows one synergy number that has not changed since signing. Fix: report the five stages by initiative.
2. No frozen baseline. Symptom: procurement savings are claimed against a price list nobody can find. Fix: freeze baselines before Day 1 and record data source and period.
3. Counting executed as realized. Symptom: a contract is signed and the full annual saving is booked, though volume dropped or the supplier raised other prices. Fix: stage 4 and 5 use observed data.
4. Ignoring cost to achieve. Symptom: severance, retention bonuses, system migration, and duplicate rent are in the balance sheet or in "other." Fix: code one-time costs by initiative.
5. Synergies owned by the deal team. Symptom: the people who built the model leave after close and nobody accountable remains. Fix: owners are inside the operating business.
6. Revenue synergies without a customer-level view. Symptom: cross-sell is "on track" but nobody can show which customer bought what. Fix: track by customer and invoice; treat revenue synergy at contribution margin.
7. Day 1 treated as a communications event. Symptom: a good announcement, then a payroll or payment failure in week one. Fix: operational readiness comes first.
8. Integrating everything. Symptom: twenty workstreams, no owner depth. Fix: integrate what the thesis requires and keep the rest separate for now, deliberately.
9. Culture and retention left to HR alone. Symptom: top salespeople or plant managers resign at month four. Fix: named key-person list with CEO-level ownership. See Culture and Retention in PMI.
10. No decisions record. Symptom: the same debate recurs each month. Fix: decisions log with expected outcome and review date.

Worked example (illustrative)

The numbers below are made up to show the method. They are not benchmarks, and they do not describe any real company.

A platform acquires a $40M-revenue distributor. The deal model shows $3.5M of annual run-rate synergy. In the first 30 days the integration lead breaks it into four initiatives and each owner validates the amount.

The cross-sell line deserves a note: the model assumed $5.0M of incremental revenue at a 30% contribution margin, which is $1.5M of EBITDA. Revenue is not EBITDA; the ledger carries the margin figure and the revenue figure side by side.

At Day 365 the ledger shows:

Reading the bridge:

• Executed run-rate is $1,950K, which is 55.7% of the model. The shortfall of $1,550K is initiatives not executed, found by initiative.
• In-period EBITDA is $880K, which is 25.1% of the model run-rate. Most of the gap between $1,950K and $880K is timing: actions happened mid-year, so only part of the annual saving fell inside the twelve months.
• Procurement illustrates the baseline discipline. Of the $900K modeled, packaging ($300K) was fully executed, freight ($150K of $250K) and maintenance supplies ($150K of $350K) were partly executed. Executed run-rate by category is $300K + $150K + $150K = $600K. In-period amounts were $200K, $50K, and $20K, totaling $270K. Because baselines were frozen on volume, finance could separate real price savings from a quarter in which volume simply fell.
• Headcount executed fully ($700K run-rate), but exits were phased and only $480K landed in the year, at a one-time cost of $420K. Payback on that line is $420K ÷ ($700K ÷ 12) = 7.2 months from the executed run-rate.
• Facility is the weak line: half executed, and $180K of one-time cost against $40K of in-period benefit.
• Cross-sell reached $1.5M of incremental revenue against the $5.0M assumed, which is $450K of run-rate contribution (30% of $1.5M) and $90K in-period.
• Net in year one: $880K of in-period EBITDA less $810K of one-time cost is $70K. The company is net positive in year one, and the run-rate entering year two is $1,950K. That is a more honest, and more useful, statement than "we are tracking to $3.5M."

What the operator does next: retire or re-scope the facility initiative, decide whether the remaining $1.5M of unexecuted cost synergy has owners and dates, and restate the cross-sell case from customer data rather than the original top-down assumption.

AI prompt assistance

AI helps with preparing and structuring. It does not replace the owner's validation or finance sign-off. Supply your own data, and check outputs against source records.

1. Decompose the deal model into initiatives.

I will paste the synergy section of a deal model and the deal thesis. Break it into individual initiatives. For each, list type (cost or revenue), the driver (volume, price, headcount, square feet), the model amount, the timing assumption, the dependency on other initiatives, and what baseline data would be needed to measure it. Flag any line where the model does not give enough information to build a baseline.

Check: the initiative amounts must sum to the model total, and each flagged gap needs a human owner to confirm.

2. Build a baseline data request.

For these initiatives [paste list], draft a data request to each finance team: the exact reports, periods, fields, and systems needed to freeze a baseline. Ask for source system and extraction date on every file.

Check: have the CFO confirm the data requested is available before sending it.

3. Draft the monthly bridge commentary.

Here is this month's synergy ledger. Write a half-page commentary for the CEO: change in executed and realized amounts by initiative, items that slipped, items challenged, and decisions needed. Do not state any number that is not in the ledger.

Check: reconcile every figure to the ledger and the GL before sending.

4. Stress-test a plan.

Here is our 100-day integration plan. List the five milestones most likely to slip and the dependency that would cause it, and for each ask what evidence we would see early if it were slipping.

Check: treat the output as questions for the workstream owners, not findings.

Implementation guide

Governance: the CEO owns the integration outcome, the integration lead owns the plan and the cadence, the CFO owns the numbers and signs the ledger, and each initiative owner owns delivery. The board or sponsor sees the five-stage ledger and the bridge monthly, plus the decisions log. Employment, regulatory, tax, and contractual steps are run with counsel and your advisers.

What to expect: Day 1 to Day 30 is dominated by operational continuity and validation, so do not expect large synergy movement. Quick wins land in the first 100 days. Large initiatives usually appear in executed run-rate in the second half of the year and in EBITDA later still. Resist the temptation to restate the model to match results; show the bridge.

Downloadable assets

The synergy ledger, the integration decisions log, the weekly agenda, and the Day 365 bridge above are designed to be copied into a spreadsheet as they stand. The acquisition synergy calculator models synergy phasing and the cost to achieve it.

Related resources

• Value creation hub: where integration sits among the levers that move equity value.
• Synergy Tracking: From Model to Realized EBITDA: building the ledger and the bridge in detail.
• Day 1 Readiness Checklist: the operational gate before announcement.
• 100-day plan template for private equity: the broader post-close plan this playbook plugs into.
• EBITDA bridge and continuous tracking: reconciling initiative results to reported EBITDA.
• Quality of earnings report before you close: the baseline earnings the synergy case is built on.

Frequently asked questions

What is a post-merger integration playbook?

A post-merger integration playbook is a sequenced operating plan that takes a signed deal to a combined, running company. It defines workstreams, owners, a Day 1 readiness gate, a 100-day plan, and a synergy ledger that measures results against frozen baselines. The playbook structures the work; legal, tax, and employment obligations still come from your agreements and advisers.

What should happen on Day 1 of a merger or acquisition?

On Day 1 the business must keep running: people are paid, cash is collected and applied, suppliers and customers are served, and authority and communications are clear. Announcements matter, but payroll, payments, and system access matter first. Use a written readiness register with an owner and a go or no-go for each item before the announcement.

How do you track synergies after an acquisition?

Track each synergy as its own row in a ledger with an owner, a frozen baseline, a stage, and evidence. Use five stages: identified, validated, executed, realized in run-rate, and realized in EBITDA. Report each stage by initiative so executed savings are never confused with savings that have reached the P&L.

How long does post-merger integration take?

It depends on the deal, so this playbook uses Day 365 as a review point rather than a promise of completion. Day 1 to Day 30 stabilizes the business, Day 31 to Day 100 sets the design and quick wins, and the rest of the year delivers the large initiatives. Some, such as system consolidation and TSA exits, can run beyond twelve months.

Why do deal synergies fall short of the model?

Deal synergies fall short mainly because the model is a top-down estimate with no named owner, frozen baseline, or one-time cost attached. Gaps also come from timing (actions late in the year), offsets such as price inflation and backfilled roles, and revenue assumed at full revenue rather than margin. A stage-by-stage ledger shows which of these applies to each line.

How this works in a System of Performance

An integration produces thousands of small decisions: who owns a synergy, what baseline was agreed, what was decided at the weekly review, and what happened next. In most companies these live in decks, email, and separate spreadsheets, so the Day 365 conversation depends on memory. A Performis routine can take on a recurring job like this, with the scope and fit agreed with you: it works from the records your team supplies, prepares the work for your named reviewer, and keeps each approval on record. To see where your own integration numbers stand, bring it to us as a launch partner.