§ 73.192. Financial considerations for stock purchase acquisition of assets.
(a) If an application is submitted to PIDA to finance the acquisition of a project property through a stock purchase, the following procedures will be followed by PIDA:
(1) PIDA will require the submission of:
(i) Financial statements, in form satisfactory to PIDA, prepared by an independent certified public accounting firm for both the acquiring company and the company being purchased.
(ii) Appraisals or other documentation acceptable to PIDA showing the fair market value of the land, buildings, equipment, machinery and similar immovable assets as of the time of the application.
(2) PIDA will review the valuation made by the applicant and its independent certified public accounting firm of the assets and the projected allocation of the total price to be paid, based on the information submitted and the review of the information by PIDA staff persons and PIDA’s independent financial consultant. Allocation should be made as follows:
(i) First, to inventories, to be valued at net realizable value.
(ii) Second, to accounts receivable, to be valued at net realizable value.
(iii) Third, to remaining assets. Utilizing fair market value, the balance of the purchase price shall be allocated among the remaining assets on a pro rata basis. PIDA will finance the acquisition of the project property based on the cost as determined by this allocation not to exceed the fair market value, or 80% of the appraised fair market value of the project property, whichever is greater.
(3) PIDA may engage the services of independent appraisers to determine the fair market value of land, buildings, equipment, machinery or other immovable assets.
(b) An application for financing of a stock purchase acquisition of assets should also meet other requirements imposed by PIDA and the act on applications for financing generally.
(c) Prior to closing a PIDA loan to finance the acquisition of a project through a stock purchase, the applicant should submit a certification from an independent certified public accounting firm as to the actual allocation made. A material change in the actual allocation from the projected allocation may result in PIDA withdrawing or reducing its loan offer.
(d) The substantial capital and substantial employment opportunities requirements established for certain projects will be applicable to stock purchase acquisitions of assets.
Source The provisions of this § 73.192 adopted November 27, 1991, effective November 30, 1991, 21 Pa.B. 5539; amended October 19, 2007, effective October 20, 2007, 37 Pa.B. 5601. Immediately preceding text appears at serial pages (230916) to (230917).
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