NEW YORK (

TheStreet

) -- Small-caps were rallying Monday on a flurry of deal activity. Shares of

American Medical Systems

( AMMD) were soaring 32% to $29.47 on volumes nearing 30 million in forenoon trading, after

Endo Pharmaceuticals

(ENDP) - Get Report

said it will acquire the incontinence drug manufacturer for $2.9 billion or $30 per share.

Communication solutions provider

Global Crossing

( GLBC) saw its stock jump 57% to $23.40 after

Level3 Global Communications

(LVLT)

agreed to acquire the company for $1.9 billion or $23.04 per share. The deal will combine two unprofitable companies with total revenue of $6.26 billion as of last year, and cut annualized capital spending by about $40 million, according to the statement.

Flower Foods

(FLO) - Get Report

picked up

Tasty Baking Company

( TSTY) for $4 a share, or roughly $165 million. The acquisition is expected to strengthen Flowers' snack cake business and expand its geographic reach. Tasty's stock more than doubled, gaining $2.35 to $3.96. Shares of Flower Foods were up 2.3% at $28.29.

Container shipping company

Horizon Lines

( HRZ) was up 13.7% on heightened volumes. The company has agreed to a settlement over business practices involving its cargo service with Puerto Rico. Horizon Lines is looking at options to refinance and restructure to avoid a debt default, according to press reports. Horizon has said it expects to default on its loans due to a $45 million fine for price-fixing in the Jacksonville-Puerto Rico trade lane.

Shares of dental laser manufacturer

Biolase

( BLTI), was up 7% at $6.16. The company announced Friday that it has executed an agreement for the sale of 320,000 shares of its common stock at $5.60 per share to institutional investors in a registered direct offering for approximately $1.80 million in gross proceeds.

Shares of

Prana Biotech

(PRAN)

were up 5% at $2.52 after it said that it had secured a key patent for its PBT2 drug in Japan.

Rare metal stocks were once again in play with shares of

Rare Element Resources

(REE)

and

Avalon Rare Metals

(AVL)

gaining 10.3% and 7.5% respectively.

--Written by Shanthi Bharatwaj in New York

>To contact the writer of this article, click here:

Shanthi Bharatwaj

.

>To follow the writer on Twitter, go to

http://twitter.com/shavenk

.

>To submit a news tip, send an email to:

tips@thestreet.com

.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.