It’s been roughly a decade since the last big rush into Latin America from U.S. dealmakers. While the earlier wave created headaches for a number of investors that had pursued deals in the region, the latest advance southward reflects an understanding that companies, which have grown in both size and ambition, are more stable than the businesses that were targeted the last time around.

Dealogic reported that M&A activity in Latin America grew to $107.16 billion in 2007, representing an all-time high, according to Reuters. In 2006, M&A activity reached $96.11 billion.

Two trends are shaping the deal landscape south of the border: Latin American companies are more often becoming the acquirers instead of the targets, and these new Latin American acquirers are starting to pursue companies across the continent as well as overseas.

“What we see developing is a much more sophisticated cross-border M&A practice, not only compared to what it used to be,” says Chadbourne & Parke partner Allen Miller, referring to past activity that more often than not was characterized by U.S. buyers. Miller, who co-heads the law firm’s Latin America practice group, adds, “It’s more like a lattice work of potential trade lines.”

As an example, Miller cites Navios Maritime Holdings’ $445 million acquisition of Argentina-based ports operator Compania Naviera Horamar SA. Greek shipping company Navios Maritime made the acquisition through its South American arm and will use the deal to serve ports in Paraguay, Uruguay, Brazil and Argentina — shipping routes that are all covered by Navios Maritime.

Given the growth of the market, dealmakers and service providers continue to build up operations in the region. Chadbourne & Parke unveiled plans in March to open up an office in Mexico City. Citigroup, meanwhile, hired Jaime Yordan earlier this year as vice chairman of global banking for Latin America, bolstering its operations already in the region. And Merrill Lynch, sensing an opportunity, bolstered its Brazilian investment banking operations with nine new bankers.

“The trick is to identify opportunities that can develop based on the savvy that you bring to the company and to the industry. Successful acquisitions have always involved that,” Miller says. “A lot of companies in the first wave of acquisitions didn’t do well. They were probably overexuberant about growth, and perhaps not as well acquainted to the regulatory system.”

The regulatory system, which caused a lot of upheaval during the first rush of M&A activity, appears to be loosening. In Brazil, for example, lawmakers are easing rules somewhat. This has been felt in the telephone wireline sector, where previously two companies were barred from sharing ownership. Today, however, the parent company of Brazil’s largest telephone provider Telemar Participacoes is set to acquire competitor Brasil Telecom, Brazil’s third-largest telephone company.

Apart from a more appealing regulatory environment, other factors are also contributing to Latin America’s rush of M&A activity. For one, the corporate sector has generated cash totaling as much as $78 billion, according to a recent report from Mergermarket, giving strategic acquirers tremendous buying power.

Also, since the region historically takes a more conservative approach to leverage, businesses and acquirers are more shielded from the tightening debt markets.

Certain industries are also dealing with factors that could favor more M&A. An increase in raw material prices, for example, is expected to spur deals in Latin America’s mining and natural resources sector. Witness the rumors surrounding a possible acquisition of Xstrata by Brazilian miner Vale do Rio Doce.

Other industries expected to see a lot of deal activity include the consumer space and industrials and chemicals, according to the Mergermarket report.

“I think the companies that are emerging as leaders in particular sectors are looking abroad for expansion opportunities,” Miller says. “Single country economies may not be big enough to accommodate their growth objectives. They’re naturally looking across borders to expand.”