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Photo by Tibrina Hobson/FilmMagic via Getty Images.

PetSmart reportedly has hired restructuring advisors to help slash its $8 billion-plus debt pile, almost all of which is attributable to the retailer's 2015 buyout by BC Partners.

Bottom line: It's not an emergency — most of the PetSmart notes don't come due for several more years, and restructuring now could take advantage of price discounts that BC hopes are fleeting — but it's the sort of thing that drives private equity critics crazy. And with good reason.

  • BC Partners did an $800 million dividend recap just one year after the acquisition, rather than paying off debt, reinvesting in the business or saving for a rainy day.
  • Now that the rainy (or at least drizzly) day has arrived, in the form of decreased profits and increased competition, it's PetSmart itself that pays for the restructuring advisors — not the private equity owners who are being paid a management fee to prevent the need for debt restructuring.
  • BC Partners bought PetSmart in early 2015, when it was obvious to absolutely everyone that specialty retail isn't immune to the move from physical to digital (i.e., this isn't like buying Toys "R" Us in 2005). Buying a popular e-commerce biz (Chewy) and having in-house vet clinics doesn't necessarily offset the rest of that brick-and-mortar expense, which becomes exacerbated by big debt.
  • A spokeswoman for BC Partners did not return request for comment.

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The assassination of Mohsen Fakhrizadeh, the architect of Iran’s military nuclear program, is a new height in the maximum pressure campaign led by the Trump administration and the Netanyahu government against Iran.

Why it matters: It exceeds the capture of the Iranian nuclear archives by the Mossad, and the sabotage in the advanced centrifuge facility in Natanz.

Scoop: Biden weighs retired General Lloyd Austin for Pentagon chief

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Joe Biden is considering retired four-star General Lloyd Austin as his nominee for defense secretary, adding him to a shortlist that includes Jeh Johnson, Tammy Duckworth and Michele Flournoy, two sources with direct knowledge of the decision-making tell Axios.

Why it matters: A nominee for Pentagon chief was noticeably absent when the president-elect rolled out his national security team Tuesday. Flournoy had been widely seen as the likely pick, but Axios is told other factors — race, experience, Biden's comfort level — have come into play.

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Illustration: Sarah Grillo/Axios

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