you should really consult a pro. there really is no need for your present S Corp to buy the new S-Corps but then maybe there's something you haven't told us which would change my answer. by the way, buying an S-Corp stock is many times the worse way to buy a business. let's say the FMV is $50 but the S-Corp you're buying has an inside tax basis of $20. you get no benefit from the exr=tra $30. at least not immediately. a pro would advise buying the assets. then you get them at $50 and if they're depreciable you get to write off the $50. you can't do this if you buy the stock. another issue with buying stock, undisclosed liabilities follow the s corp. so while they want protection if you default what protection do you get if there are undisclosed liabilities like a lawsuit.
